This article comes from the official account: Option Understand
Options have gradually entered the public eye, and now there are actually many investors in options trading, so everyone will understand that options include call options and put options at the very beginning, so this time the option understanding will take you to understand call options and put options with an article. #期权日记##期权交易##上证50etf期权#
Call Options
A call option is a kind of financial derivative instrument, as we all know, an option is to give the investor who buys an option a certain moment in the future, according to the price agreed on the previous option contract, to buy or sell the agreed amount of the underlying asset, the concept of option will not be outlined later.
Quite simply, a call option can be easily understood as a call, and when the investor thinks that the price will rise, the investor can choose to buy the call option to amplify his return.
Generally speaking, call options are used when investors are optimistic about the underlying assets, that is to say, when investors are bullish, they can use call options through options with small and large leverage effects, so that call options can amplify their returns.
The income of a call option is that when the underlying asset really rises according to the investor's thoughts, the investor can choose to exercise the option, exercise his rights, and obtain the corresponding asset. Or investors can choose to close the position and directly receive the yield premium.
Put options
The concept of options has just been mentioned in the above call option, so I will not repeat it here. Put options can be easily understood as bearish, when investors are not optimistic about the underlying asset, thinking that the price will fall, then investors can choose to buy put options, protect their assets, and at the same time obtain income.
Put options are generally selected when the underlying asset declines and the investor is not optimistic about the underlying asset. Generally speaking, when the investor owns the corresponding underlying asset (stock or other), the investor will choose to use put options to hedge the risk caused by the decline of the underlying asset, and protect their money in this way. Of course, it is not excluded that some investors will continue to be unoptimistic when the market has fallen sharply, and use put options to amplify their gains.
The income of a put option is that when the underlying asset is the same as the investor imagined, the investor can choose to close the position and directly obtain his own income. Generally speaking, investors will choose to close the put option.